the dynamics of public sector reform reflections from the italian experience franco bassanini member...

THE DYNAMICS OF PUBLIC SECTOR REFORM

Reflections from the Italian Experience

Franco BASSANINIMember of Italian Senate

Former Minister for Public Administration

2nd Quality Conference for Public Administrations

Copenhagen, October 2-4, 2002

www.bassanini.it

F.Bassanini - The Dynamics2

The urgent needfor change

the “modern democracy” reasons the “modern economy” reasons the “globalisation” reasons


1- the « modern democracy » reasons

• the sunset of the traditional “relationship of authority” (and of a “self-referential” P.A.)

• the “shifting of the barycentre of Administrative Law” from the “administrative act” to the “administrative relationship” between citizens and P.A.

• Increasing demand of “effectiveness” of democratic values from citizens/businesses

• New “public goods” besides legality (i.e., efficiency, transparency, accountability)

•from the pursuance of the “legitimacy” of a public regulation or act to the pursuance of its “utility”

• from an “authority-oriented” to a “consumer-” and “performance-oriented” Public Administration


2- the « modern economy » reasons

Some concrete examples of economic effects of Administrative Reform programmes:

• USA – burdens of bureaucracy on business of 500 billion USD (about 10% of GDP) – Clinton-Gore “Reinventing Government” program produced savings between 42 and 54 billion USD

• EU – burdens of bureaucracy on business of 540 billion Euro (about 3-4% of GDP) – Single Market, enhancing competition and substituting single national requirements with single European ones, improved European GDP by about 1,5% between 1987 and 1993

• ITALY – Citizens’ savings: annual savings for certificates and certified signatures due to “self-certification” program (in million Euros): 527 in 1998, 544 in 1999, 1128 in 2000; Business savings: after the one stop shop and other simplifications, the number of procedures needed to create a new corporation or an individual business had been reduced from 25 to 5 and maximum time needed for the whole process dropped from 22 to 10 weeks. Costs were reduced from 7,700 to 3,500 Euros for corporations and from 1,150 to 500 Euro for individual business

Increasing role of Public Institutions to boost economic growth, also in the “new economy”


3 - the « globalisation » reasons

Rapid development of ICT

Increasing role of international enterprises

Competition between “Continental-systems” (more than between “Country-systems”)

decreasing importance of national borders

Influence of the different performances of national public administrations: for every Country, the quality of national regulation

and the efficiency of public administration are factors of competitiveness


Not a single model for an Administrative Reform, but…

Not a single model (nor a single Italian recipe), but …

… some common characteristics … … some common “basic ingredients” … … some common problems …


Not a single model, but …. some common characteristics

• The sunset of the “lawyers’ monopoly” (growing awareness of the strong impact of P.A. on citizens’ lives and on economic activities)

• Lack of relevance of the national peculiarities of constitutional systems towards Regulatory and Administrative Reforms

• Growing attention of the main international organizations (UN, OECD, IMF, WTO) on Governance and “Regulatory Reform” issues


Not a single model, but …some common “basic ingredients”

for an Administrative Reform

•A specific policy (e.g., through specific P.M. delegations to the Minister for P.A.) and a sustained political support for Administrative Reform (but also emphasizing its “bipartisan” nature)• A “multidisciplinary approach”• Clear objectives and measurement of results• Involving citizens, business and other “recipients”• Creation of a public management; capacity building• Similar tools also for Regional, Local and “Independent” Authorities

The Italian case

A useful experience to draw some general conclusions from


Public Administration in Italy in the early Nineties

• An An obsoleteobsolete administration: no government-wide administration: no government-wide reforms since 1865reforms since 1865

• A A bureaucraticbureaucratic, interventionist, rigid and , interventionist, rigid and centralizedcentralized State State

• An An inefficient inefficient administration: islands of administration: islands of excellence in a sea of general inefficiencyexcellence in a sea of general inefficiency

• A A costlycostly administration: crucial need to balance administration: crucial need to balance the budget and reduce public debtthe budget and reduce public debt


Italian public debt up to 1994 (% of GDP)

57,7 59,964,9

70

86,390,5 92,6

124,9

101,598

108,7

119,1

82,3

75,2

95,6

55

65

75

85

95

105

115

125

135

Source: Italy - Ministry of the Treasury


Public Administration Reformin Italy 1996-2001Reasons of interest

A Government-wide ReformA Government-wide Reform• based on a “based on a “multidisciplinary approach”multidisciplinary approach”

• completely achieved in its laws and completely achieved in its laws and decrees, still partially implementeddecrees, still partially implemented

• that has produced remarkable changesthat has produced remarkable changes

• Up to now, recording many successful Up to now, recording many successful experiences and some failuresexperiences and some failures


Public Administration Reformin Italy 1996-2001Reasons of interest

Positive returns: some examplesPositive returns: some examples

Customer Satisfaction:% of Positive Opinions about Italian

Administrations’ Efficiency: 1997-2001 (Source:ISPO)

0

10

20

30

40

50

60

1997 1999 2001


Revenues from Privatization in OECD Countries (1993 - 1999)

7,88,1

25,533,1

40,4

66,469,371,1

102,9

bill

ion

€

Source: OECD


Progress in regulatory capacity indicators, 1998-2000

0

20

40

60

80

100

Transparency Use ofRegulatory

Impact Analysis

Structureddecision

processes

Index of reviewactivity

Communicationof regulatoryrequirements

ITA-1998

ITA-2000

Source: OECD, The Regulatory Reform in Italy, 2001.


Competitiveness of OECD Countries

Ireland

Australia

UK

USA

Finland

Austria, Netherlands & Sweden

New Zeal.

Germany

Japan

Italy 2001

Spain

Italy 2000

SwitzerlandBelgium

Canada

Denmark

Italy 97

GreeceNorway

France

Portugal

0,4

0,9

1,4

1,9

2,4

0,0 1,0 2,0 3,0 4,0 5,0

Labour market regulation

Pro

du

ct

mark

et

reg

ula

tio

nBetter Competitiveness = 0

(down on the left)

Source: OCDE 1999 et 2001

Effects of Regulation on Competitiveness


Costs of public employees (% of GDP)

Source: OECD and Minister of Treasury

12,8 12,7 12,712,5

12

11,6 11,5 11,4

10,910,7

10,5 10,510

10,5

11

11,5

12

12,5

13


Public employmenta comparison between France and Italy

France ItalyTotal population 58 ml. 57 ml.Public employees 5,4 ml. 3,3 ml.Public employees/population 9,30% 5,70%Public salaries/GDP 14,60% 10,50%


Public Deficit (% of GDP)-11,1

-10,1-9,6

-8,5-9,2

-7,7

-6,6

-2,8-1,7

-2,2

-1,9

-2,7

-12

-10

-8

-6

-4

-2

0

Source: ISTAT


Public Debt (% of GDP)

98

101,5

108,7

119,1

124,6122,4

118,7

114,9112,1

109,8

125,3

124,9

94

99

104

109

114

119

124

129

Source: ISTAT


SimplificationNumber of Certificates issued per year

Source: Italy – Department f Public Administration

70.641.741

51.661.396

31.800.000

1996 1998 2000


SimplificationNumber of Certified Signatures requested by

the Public Administrations (per year)

Source: Italy – Department f Public Administration

38.200.000

5.900.000

1996 2000


Simplificationthe People’s Opinion

92%

8%

yes

no

92%

8%

yes

no

Do you know that in most cases all you need is a self-declaration?

Do you think it is useful?

Italian Administrative Reform

Lessons learned


1- Totally inefficient Administrations 1- Totally inefficient Administrations are easier to reform are easier to reform

• The need for change drives large calls for reform and The need for change drives large calls for reform and consequently a large consensus on radical projects of consequently a large consensus on radical projects of reform among:reform among: Public Public Business Business Trade UnionsTrade Unions Parliament Parliament (a bipartisan reform)(a bipartisan reform)

• States with efficient administrations (e.g. France) States with efficient administrations (e.g. France) usually face greater difficulties in projecting radical usually face greater difficulties in projecting radical reforms reforms (the more inefficient an administration is, the (the more inefficient an administration is, the easier is to have consensus for reforming it)easier is to have consensus for reforming it)


2- 2- Comprehensive reform efforts are Comprehensive reform efforts are more effective than piecemeal processesmore effective than piecemeal processes

SectionalSectional reforms are most likely to fail reforms are most likely to fail

The Italian caseThe Italian case

During XX CenturyDuring XX Century • any attempt of reform in Italy failed because of its any attempt of reform in Italy failed because of its

gradualist approachgradualist approach• the system had grown only by “adding layers” the system had grown only by “adding layers”

In the late 1990’sIn the late 1990’s• tthe first Government-wide Reform he first Government-wide Reform since 1865 since 1865

succeeded for its comprehensive character succeeded for its comprehensive character


Italy 1996-2001 A Comprehensive Reform

Wide range of approaches• Reshaping of the State• Modernisation of organisational structures

and functions• Innovation in the delivery of public services• Renewal of the culture of public institutions • Reinvention of the mission of public bodies


Italy 1996-2000

A comprehensive Reform involving radical changes in the following main areas:

• Refocusing public sector’s Refocusing public sector’s mission mission (devolution, outsourcing (devolution, outsourcing and “administrative federalism”)and “administrative federalism”)

• Simplifying regulatory and Simplifying regulatory and administrative burdensadministrative burdens

• Reorganization of Central Reorganization of Central GovernmentGovernment

• Civil Service ReformCivil Service Reform

• Towards a performance-Towards a performance-oriented public sector oriented public sector managementmanagement

• New Public BudgetingNew Public Budgeting

• A more transparent and A more transparent and comprehensible Governmentcomprehensible Government

• Reshaping Government Reshaping Government through ICT through ICT ((ee-Government)-Government)


The Main Legislative Tools of Reformin the Italian Experience

• A broad A broad “delegating law” (“delegating law” (legge delegalegge delega)) n. 59 of 1997: n. 59 of 1997:Parliament delegates Government the power to adopt “legislative decrees” (primary level regulation) in defined areas, pursuant to the principles set by the law

• The The ““delegislationdelegislation” ” mechanism: mechanism:Parliament authorizes Government to substitute primary laws with Governmental decrees (secondary level regulation) in two main sectors: administrative procedures and organization of public offices

• A A Constitutional Reform Constitutional Reform shaped following the model of the shaped following the model of the federal Statesfederal States

3- The Reform must reinvent the Government’s Organisation but also (or

before) reconsider the Government’s Missions

• Horizontal Subsidiarity and

•Devolution

for a leaner but more efficient State


Horizontal subsidiarityHorizontal subsidiarity for a leaner but more efficient State

focusing Government on its core business:focusing Government on its core business:

closingclosing unnecessary Government activities unnecessary Government activities

outsourcingoutsourcing and/or privatizing activities that can and/or privatizing activities that can be more efficiently undertaken by the private sector be more efficiently undertaken by the private sector (business and non-profit organizations) (business and non-profit organizations)

liberalizationliberalization of public utilities of public utilities


Liberalization and Privatization (Italy)

• Liberalization. Some examples: 231 fixed telecommunication licenses and 174 telephone operators instead of

Telecom Italia monopoly unbundling of local loop from end 2001 from ENEL (public owned company now partially privatized) monopoly of

electricity market (90% in 1990) to free competition (Enel obliged to drop under 40% in 2003)

Liberalization of commercial activities and of 30 other productive activities (no more licenses or authorizations)

• Privatization of public utilities: TLC, banks, gas and electricity system, iron metallurgy etc.

world largest privatization program (total revenue up to end 1999: 103 billion Euro)


Privatizationtotal stock market cap/GDP

7766,4

45,7

30,8

20,618,417,915,111,5

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

(fe

b.)

The privatization program has contributed to foster the growth of the Italian equity market

4 - Devolution: Vertical subsidiarityMoving public service nearer to the citizen

• The Democratic Governance of the Modern Complex Society, in the Age of Globalization and ICT, requires a wise division of labour, tasks and responsibilities between local, regional and central administrations and a stronger and more efficient local government•The Net economy does not eliminate the value of social and cultural proximity • Globalization has not reduced, indeed it has increased the role of local government institutions

•Furthermore the need of coordination that in the past could only be adequately satisfied by centralising decisions on public policies at a higher territorial level, finds an adequate response today in the new possibility of peer to peer coordination allowed by ICT. The plurality of deciders is no longer a source of anarchy. On the contrary, it guarantees adherence to needs and demands of citizens.

•The internet functioning model, based on an effective and experimental combination of autonomy and co-operation, suggests analogous models for government


Devolution: Vertical subsidiarity Italy – The parallel ways of the Reform

Connection between Constitutional and Administrative Connection between Constitutional and Administrative FederalismFederalism

In 1996-2001 (In 1996-2001 (CenterCenter-Left Governments Prodi, -Left Governments Prodi, D’Alema, Amato) the Reform of the State followed two D’Alema, Amato) the Reform of the State followed two parallel ways:parallel ways:

• Reform of the ConstitutionReform of the Constitution

• Reform of the State and its Administration through Reform of the State and its Administration through primary and secondary sources of lawprimary and secondary sources of law

Same objectives, different actors, different waysSame objectives, different actors, different ways


Devolution: Vertical subsidiarity Italy - The Constitutional Reform

• The Constitutional Reform partly failed because of the Centre-Right opposition, that blocked the project drafted by the Committee for the Reform of the Constitution.

Nevertheless:

• In 2001, Parliament and Italian voters (with a referendum) approved the federal reform of the State (still to be completed with the reform of the Senate, following the French model)

• The Constitutional reform reinforces the decentralisation reached through primary law (administrative and fiscal federalism), otherwise bound to remain incomplete and precarious


Towards the Federal Statethe general strategy

• Strengthening Strengthening stabilitystability of local Governments of local Governmentsdirect election of Mayors (since 1993), Presidents of Provinces (1993), Presidents of Regions (2000)

• Strengthening Strengthening financial autonomyfinancial autonomy of local of local Governments: the Governments: the “fiscal federalism”“fiscal federalism”transformation of State financial transfers to Local Authorities into local taxation or participation in main State taxes (VAT, Income tax…)

• Strengthening Strengthening sovereigntysovereignty of Local Governments of Local Governmentstransferring general legislative powers to Regions (constitutional bill approved by the Parliament)

• Strengthening Strengthening efficiencyefficiency of Local Administrations of Local Administrationsreform of control mechanisms, “city managers”, local public managers chosen also from private sector, salaries linked to performance


Devolutionthe “administrative federalism”

The Italian route to decentralize

(administrative federalism)

Identification of a mandatory (and “closed”) list of Central tasks and planning the devolution of all other tasks to Local Authorities

Identification in detail of the tasks to be transferred from Central to Local level of government

Transferring NOT ONLY groups of tasks BUT ALSO the related human and financial resources to Local Administrations (strengthening efficiency and financial autonomy of public administrations “on the territory”)


Devolutionopinions of the public

Yes 36,1

Yes, in part 31,7

No 24,9

Doesn't know

7,3

Has the “Bassanini reform” improved the efficiency of local Governments?

Source: unicab – sole 24 ore


5 – Cutting the red tape: a fundamental Pillar of the Reform

A comprehensive strategy for reducing bureaucratic costs and administrative burdens on citizens and businesses based on:

• Simplification

• Better regulation


SimplificationSome common problems

• Key role of Regulatory systems to boost economic growth

• Weaknesses of the traditional “command and control” regulatory style in the last decades

• Deregulation (and <) High Quality Regulation


Some common phenomena

• Regulatory Quality is becoming an “autonomous public interest”, beside sectional ones …

• Concrete consequences:- in the Governments (ad hoc Units, specific PM delegations)

- in the Parliaments (ad hoc Committees)

• Some interesting characteristics:- scarce relevance of the peculiarities of constitutional systems

- the sunset of the “lawyers’ monopoly”


Simplificationstrategies and tools to reduce burdens

• Not a “one shot” policy, but a process:•need of rolling simplification programs (e.g., through annual simplification laws or through multi-annual plans), enabling Government to abolish or simplify existing procedures, authorizations and licenses

• Some common simplification tools:• “Self-declarations” replacing most of the certificates, and severely punishing those who do not self-certify the truth

• “Notification of the beginning of an activity” and silent-consent replacing most authorizations and licenses

• One “combined services conference” replacing many administrative acts

• Importance of: consultation, measurement, ex post monitoring


Simplification in Italy the problems

• Regulatory inflation:Regulatory inflation:over 35,000 primary laws (of State and Regions)

• Regulatory costs:Regulatory costs:unnecessary burdens on the public, on businesses and even on public administrations

• Regulatory pollution:Regulatory pollution:ambiguity, contradictions, overlapping, layers of rules generate uncertainty on the existing law


Simplification: two examplesfrom the Italian experience

a) for citizens: simplification of certificates

All the norms on administrative documentation and on electronic documents are collected in one single text “code” on administrative documents

More than 95% of certificates have been substituted by “self-certifications”: a signature of the citizen on “simple white paper” (without any tax)

The new regulation can be used also by privates sector (banks, post offices …)

Use of electronic instruments and faxes is always admitted

It is forbidden for P.A.s to require a certificate when a self-certification is possible

Severe punishment for false self-certifications, but till now only 0,4% of the ex-post controls have resulted positive

Towards a complete “de-certification”: total elimination of the need of certificates through the electronic exchange of data among P.A.s


b) for business: the “one stop shop” for the start up of productive plants

“Not only a single access, but also a single answer” Since 1999: a single procedure to start up a new business, replacing 43 authorizations previously needed Previously: 2-5 years to get a final answer Presently: normally no more than 3 months in most cases, max 11 months (average time: 57 days in a sample of 100 one stop shops) One single office to deal with businesses and a new role for Municipalities in the development of their territory Turn-key contract (within an ad hoc training program) for the supply of 109 one stop shops serving 785 municipalities (small municipalities can pool together) An e-structure, accessible through the net


One stop shops

The difficultiesThe difficulties• Half of the municipalities are not equipped with them

(40% of the Italian population)• Lack of collaboration of many central and local

administrations

The answersThe answers• Simplification, acceleration, a unique proceeding and a

unique person in charge• Government action plan for spreading and improving

one stop shops


Deregulation in Italy 1996-2001Regulations introduced / Regulations cancelled

13485

2286reg. introduced

reg.cancelled


Simplification in Italy 1996-2001Number of procedures needed to set up new companies

Avant 2000Apres 2000

21

5

11

5

individual business corporation

Before dec. 2000

After dec. 2000

Source: OCDE, Service de la gestion publique, 2000


Did you like the self declaration reform?

Very much

Little/not at all

Enough

Base: 2.010 POPULATION

Very much

Little/not at all

Enough

Base: 1.018 ENTREPRISE

Source: CIRM 2001

Simplification People’s Opinions


Better regulationwhy?

A mere “deregulation” is different from a

“high quality regulation”(and is less useful too)


Better regulationsome tools

• Regulatory Impact Analysis (RIA, now used by 20 OECD Countries)(to measure the cost of new regulations on the public and business):

- not a mere arithmetical analysis, but an ongoing, evolutionary process to inform the political choice; a tool to give the rule-makers the “awareness” …-… including the views of stakeholders- applicable to all kinds of “relevant” Regulation - not an ex post justification, but an analysis to be set up at the beginning of the regulatory process, considering both alternative Regulatory options and …

• … alternative options to Regulation (including a wise use of self-regulation) • Consultation• Compliance analysis


Better regulationthe structures

• Sectional Ministries are the first responsible for Regulatory Quality, but …

•… - because “it is often difficult for ministries to reform themselves, it is necessary to give countervailing pressures, and maintain consistency and systematic approaches across the entire administration …” (2001 OECD Report on Regulatory Reform in Italy) - …

• … often can be very useful a Central Unit (now established in many OECD Countries): a task force of experts - better if in P.M.O. - exclusively monitoring “regulatory quality”, responsible for RIA and/or for simplification and codification programs

• The importance of involving Parliaments


Better regulationsome tools: the use of IT

• On line updated version of existing Regulation (> Official Gazette on line!)

• On line Parliament bills and activities

• On line consultation (“notice and comments” model)

• Central Electronic Register of bureaucratic formalities (for business, but not only …)


Better regulationstrategies/tools to tidy up regulation

• .

• Codification or consolidation• Few consolidated texts should replace thousands of laws and decrees (better if with the help of a “guillotine system”)

• Trying to merge Codification and Simplification (and electronic register)

• The Italian case of delegislation ( deregulation)• a mechanism by which a primary law (“legge di delegificazione”, enacted by Parliament with the normal procedure): - identifies the general discipline of a certain issue and - empowers Government to repeal and substitute primary laws with Governmental “delegislation decrees” (secondary level regulation)


6- e-Government

ICT:• the best resource for a leap forward in service to

citizens and in quality change• A crucial tool for - reinventing Government - re-engineering administrative procedures - introducing new organizational, architectural

and operational model of administration


e-GovernmentThe regulatory instruments

• A valid authentication mechanism is needed to access online services and online personal data

...to make sure that the right person gets the right service and has access to the right personal data...

• Electronic smart cards can solve this crucial problem if combined with some legal tools: Electronic I.D. card regulation, or: Electronic signatures regulation, and: Electronic document registration regulation A new discipline on administrative documentation


e-Government: Italian experienceFirst Achievements

• Electronic signature (having legal value since 1998): Electronic signature (having legal value since 1998): certified by private companiescertified by private companies

• Electronic ID card (in distribution since 2001)Electronic ID card (in distribution since 2001)• Electronic public procurementElectronic public procurement• «Electronic Revenue Service»: from 2000, 100% «Electronic Revenue Service»: from 2000, 100%

income tax returns (33 millions per year) are filed and income tax returns (33 millions per year) are filed and reviewed electronicallyreviewed electronically

• Land Register (since 2001 80% of documents Land Register (since 2001 80% of documents are filed are filed and reviewed electronically)and reviewed electronically)

• 6,2 bill. € :public investments in e-Gov in 2000-20026,2 bill. € :public investments in e-Gov in 2000-2002


The Italian Action Plan fore-Government (2000): guidelines

• Citizens will obtain any public service by simply applying to any front-office administration in charge

• Citizens will communicate variations in their personal information to the administration only once

• Each administration will be able to gather the information needed, wherever stored (all public services on line)

• All the public services for which it is technically possible will be delivered on line


Electronic I.D. cards and digital signature cards: enabling tools for the digital government

ID cards and/or digital signature cards.....

.... could serve as an identity document, but will also be the means for authentication of the citizen by any and all public information systems

....will enable its possessor to request the services of the administration on-line with a single procedure for authentication

.... will enable to “sign” all forms and transactions with governmental bodies that do require the citizen’s signature to be legally valid


The Italian Action Plan fore-Government – Key Tools

• Information portals• Portals for delivering on-

line services• National networks• Local administrations on

line• Integration of personal

data • National index of personal

data

• Exchange of information system for local land-registries

• Electronic identity cards• Promotion of digital

signatures• Electronic Protocols• e-procurement• Foundation courses• Specialist courses


7 - Reorganization ofCentral Government

• The Democratic Governance of the modern complex Societies, in the Age of Globalisation and ICT, requires stronger and more efficient Central Governments

• The devolution of powers, tasks and financial resources to regional governments and to European Union curtails Central Governments’ missions and requires new capacity of coordination and dialogue

• A government-wide Reform of Ministries and Agencies and a targeted reform of the “Center of the Government” are needed to adjust Governments to new missions and capability


Reorganization of Central Governmentin Italy 1996-2001

• The first government-wide Reform The first government-wide Reform since 1865since 1865• Merging bodies with similar missions; eliminating with similar missions; eliminating

duplication and segmentationduplication and segmentation

Reducing the Ministries from 22 (in 1995) to 18 (present) to from 22 (in 1995) to 18 (present) to 12 (increased to 14 by the new Berlusconi’s Cabinet)12 (increased to 14 by the new Berlusconi’s Cabinet)

• End of the traditional “pyramid model” for Ministries internal End of the traditional “pyramid model” for Ministries internal organization as general modelorganization as general model

Internal organization established Internal organization established by a by a more flexible secondary regulation secondary regulation


Reorganization of Central Governmentin Italy: the Prime Minister’s Office

A leaner but stronger, more flexible structureA leaner but stronger, more flexible structure• Additional specific responsibilities of P.M.O.:Additional specific responsibilities of P.M.O.: Government reform, regulation, P.A., dialogue with supra- and intra- national Authorities (EU, Regions, Municipalities)

•Making the role of stimulating, guiding and coordinating Making the role of stimulating, guiding and coordinating more effectivemore effective

Transferring all other executive tasks to Transferring all other executive tasks to “sector” administrations“sector” administrations


Reorganization of Central Governmentthe new structures

•Introducing “Agencies”: non-ministerial bodies with technical and executive tasks

• “Central Government Local Offices”: merging several State local offices into a single “interministerial” body


8- Civil Service Reform: the new trendsmaking P.A. + similar to private employer

(privatization!)

•Access to civil service should remain by public competition (with modern systems accelerating them)but in some Countries a limited number of public managers may be chosen from outside the Civil Service for a fixed term (as in UK, Spain, Italy, but NOT in France) exception: spoils system (USA)

• Improved mobility of civil servants:- within different Public Administrations-with international organizations - with private sector

68 F.Bassanini - The Dynamics

Civil Service Reformdistinguishing Politics from Administration

• «Politicians are responsible for Policies»:«Politicians are responsible for Policies»:Ministers define policies and strategies, assess results, appoint general directors but have no further direct involvement in administration

• «Public managers are responsible for Administration»:«Public managers are responsible for Administration»:public managers are given broader powers but also greater responsibilities, and higher salaries linked to results and performance


Civil Service Reform in Italymaking P.A. + similar to private employer

(privatization!)

• Civil law for civil servantsCivil law for civil servantspublic administration has the same powers as private sector employers; laws and decrees replaced by contracts

• Civil courts for civil service disputesCivil courts for civil service disputessince 1998 transferred from the Administrative to the Civil Courts


Civil Service Reform (Italy)the “contractualization” of Civil Service

• Labor Contracts:Labor Contracts: collective bargaining (at national and local levels) replaced the law in

determining employment conditions, salaries and tasks. The “integrative negotiation”

promoting efficiency and professionalism through individual integrative contracts

• «A.R.A.N.»«A.R.A.N.»an Agency created to represent the State in labour negotiations in place of the Minister (but following Government guidelines)

• Reform of labor representationReform of labor representationfor each public sector (Ministries, Education, Health …) bargaining with the State is allowed only to those Unions having more than 5% of the consensus in that sector


Civil Service Reform in Italythe Resistances

Strong contradictions and incoherencies remain in:Strong contradictions and incoherencies remain in:

• The behaviour of politicians, administrators and public The behaviour of politicians, administrators and public managers:managers: no global vision in salary increases strong defence of privileges and of the “maze of charges”

• Parliament choices:Parliament choices: The choice, in principle, in favour of collective bargaining, meritocracy and

quality is contradicted by the constant enactment of rules creating favouritism: “ope legis” promotions, permanent hiring without concours of pro-tempore workers etc.


Civil Service Reform in ItalyThe behaviour of Trade Unions:The behaviour of Trade Unions:

The Italian Trade Unions supported the Reform including devolution and decentralisation, privatisation of Civil Service, introduction of cost and performance controls and productivity incentives

But the choice, in principle, in favour of professionalism and merit, responsibility and decentralisation is sometimes contradicted


9- A performance-oriented Administration:a cultural revolution for many European Countries

• BeforeBefore: a formal/juridical approach to government:: a formal/juridical approach to government:compliance with laws and procedures without regard to quality and results

• NowNow: a consumer-oriented approach: a consumer-oriented approach quality service and customer satisfaction new performance control complementing traditional legal control public service charters promoting professional growth: a special training program

• Public administration “close to citizens and businesses”:Public administration “close to citizens and businesses”: favors the allocation of investment capital acquires relevance “beyond the national borders” partially sheds its authoritative nature


A performance-orientedpublic administration

the Resistances

• Administrations and judges still show a legalistic and Administrations and judges still show a legalistic and statist culturestatist culture

• The defence of irremovability and irresponsibility of top The defence of irremovability and irresponsibility of top civil servants in the name of administrative neutralitycivil servants in the name of administrative neutrality

• The fear of the spoil systemThe fear of the spoil system

• The refusal of the culture of evaluation and meritThe refusal of the culture of evaluation and merit


A performance-orientedpublic administration

the new public management in Italy

• AAccess by ccess by concours, concours, a formal competitive examinationa formal competitive examination((no more than 5% of managers may be chosen from outside the Civil no more than 5% of managers may be chosen from outside the Civil Service for a fixed term)Service for a fixed term)

• No more “jobs for life”: individual contracts (fixed term: 2-No more “jobs for life”: individual contracts (fixed term: 2-7 years) determine assignment, duties and salaries7 years) determine assignment, duties and salaries

• Managers’ salaries vary depending on responsibilities and Managers’ salaries vary depending on responsibilities and performancesperformances


The top public managers’ payment system

• Before: no distinctions in the salaries of high civil servants considering the position and the performances

• Now: salaries taking into account the responsibilities and the achievement of the results.


Relationship between fixed and variable salaries before and after the reform (top managers of local administrations)

fixed 95%

variable 5%

fixed 60%

variable 40%

Before law 29/93 After 1997


10– A clear Strategy, a strong Leadership: the crucial Role of the “Center of the Government” in the Reform Process

To overcome the resistances:

• A clear strategy of change at the highest political level and a strong political support for Administrative Reform by P.M.

• A strong leadership: Concentration of responsibilities for the coordination of administrative reform policy (e.g., through specific P.M. delegations to the Minister for P.A.)

Italian experience - in 1996-2001 (Center-Left governments ): key role of the Minister for P.A. responsible for all instruments of reform

(Government reform, innovation of P.A., better regulation, e-Government, Devolution, etc.)

- Now: lack of coordination (responsibilities split among the Ministers for P.A., for IT, for Devolution, for Regional Affairs....)


11- Government’s Stability and Continuity of the Reform Process

Both conditions are essential to gain successful results because:

•A Government-wide programme of Administrative Reform:

is in constant risk of failure

will take quite a long time (one legislature is not enough!)

will need a large consensus (possibly, bipartisan consensus) …


Government’s Stability and Continuity of the Italian Reform Process

The Italian Administrative Reform • ... has been built during the last 5 years, largely with a bipartisan

support• ... still needs to be fully implemented, but….• …the new Government is putting under discussion some

successful pillars of the reform.Examples: Reform tasks and responsibilities split between the Minister for

P.A., for IT, for Devolution, for Regional Affairs Back to public (administrative) law for top public managers Reintroduction by decree of two sector ministries Suppression of the Central “Regulatory Simplification Unit” in

PMO


12- Improving transparency, comprehensibility and legality of P.A.

• Improving transparency: the “right of access”

• Previously: secrecy of administrative acts was the rule, access the exception

• From early ’90s, in more and more Countries: access to administrative acts is the rule, secrecy the exception

• Administrative judges are the “watchdogs” of citizens’ right of access


Improving transparency, comprehensibility and legality of P.A.

• Improving comprehensibility: simplifying administrative jargon and communicating with the public

• proposals for the standardization and simplification of the most common official forms

• use of a «Style Manual» as a practical tool for employees involved in written communication

• training and communication strategies to improve “communicativeness” of civil servants (the model of American NPR, following the example of private firms)

• A special strategy to improve front-line structures


Improving legality of P.A.Improving legality of P.A.

The “traditional” French model of Administrative Justice still seems to work, but can be improved:

… crucial importance of shortening the times of a process

… further broadening the legitimacy to appeal (e.g., through so-called “diffused interests”)

… enhancing the liability of P.A. (e.g., submitting P.A. to the usual “liability rule”)

… making the “enforcement powers” of administrative Judges towards P.A. more effective


13- The crucial phase of 13- The crucial phase of implementationimplementation

What are the main challenges?What are the main challenges?

-Changing the culture-Changing the culture

-Communication-Communication

-Investing on Public Administration-Investing on Public Administration


The crucial phase of The crucial phase of implementationimplementation

Changing the cultureChanging the culture

Acquiring and disseminating new approaches:Acquiring and disseminating new approaches: to technological and organizational to technological and organizational innovationinnovation to to simplificationsimplification (releasing unnecessary administrative (releasing unnecessary administrative

burdens)burdens) to quality of service and to quality of service and performanceperformance to citizen-to citizen-user satisfactionuser satisfaction to rewarding to rewarding professionalismprofessionalism and and meritmerit to promoting, encouraging and to promoting, encouraging and energizingenergizing citizens and citizens and

businessesbusinesses



CommunicationCommunication

disseminating anddisseminating and

sharing information to sharing information to

explain to citizens their new rightsexplain to citizens their new rights



Investing on Public AdministrationInvesting on Public Administration

in training, to improve knowledge and awareness of the main interpreters of the Reform

in IT, to exploit the enormous opportunities of digital revolution

in financial incentives, to promote quality of services and professional growth


Good luck!A Government-wide programme of Administrative Reform:

will constantly risk failure, but ....

…but can be successfully conducted (as shown by several national experiences) …

… and can be effectively encouraged by private sector and by International Organizations (UN, OECD, FMI, WTO …)

the dynamics of public sector reform reflections from the italian experience franco bassanini member...

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